Warren Buffett's Berkshire Hathaway pushed spending on stocks its lowest level in more than five years, and the company was selling more stocks than it was buying by the end of the second quarter.

Though Buffett is still buying some carefully selected equities, he’s buying more corporate and government debt these days.

During a recent interview, Buffett refused to comment on where stocks are headed, The New York Times reports, but did warn extensively about the dangers of investing with borrowed money, or leverage, which proved disastrous when the crisis hit.

“It has been an incredibly interesting period in the last year and a half. Just the drama,” Mr. Buffett said.

“Watching the movie has been fun, and occasionally participating has been fun too, though not in what it has done to people’s lives.”

Asked if anything was keeping him awake at night, Buffett replied there was not.

The struggle between the bears and the bulls shows up clearly in the gulf that separates the opinions of economists from those of Wall Street analysts, says Christopher R. Wolf, managing partner and co-chief investment officer, Cogo Wolf Asset Management.

“The prospects for high-yield bonds as attractive investments rest in the middle of this gulf and will be dependent on whether default rates and recovery rates rise or fall over the next twelve months,” Wolf writes at Financialplanning.com.

Not surprisingly, Wall Street’s biggest bond houses are jettisoning Treasury bonds and stepping out on the risk curve instead.

Treasury holdings among the 18 primary dealers that trade directly with the Federal Reserve reversed to a net short position of $10.5 billion last month from a record net long position of $93.6 billion in June, according to Fed data cited by Bloomberg.

That’s the fastest turnaround since the Fed began compiling the numbers in 1997. So the bond houses clearly aren’t afraid of risk, despite the fragile economic recovery.

“It’s money going back to work again in some level of riskier assets,” Donald Galante, chief investment officer of fixed income at MF Global, told Bloomberg.

“Panic has receded and you are in a more normal world, with dealers starting to take on a little bit more leverage. They are taking on some inventory in the corporate world and hedging with Treasuries again.”

To be sure, August’s net short position of $10.5 billion was nothing compared to the average net short of $63 billion in the 10 years before the collapse of sub-prime mortgage loans in 2007.

But on balance, “dealer behavior in the fixed-income market has begun to return to normal,” Joseph Abate, a money-market strategist at Barclays Capital, told Bloomberg.

Not everyone sees the trend continuing.

Gold could rise as high as $1,250 an ounce next year if risk appetite falters, Nick Bullman, managing partner of hedge fund Bullman Investment Management, told Reuters.

Warren Buffett's Berkshire Hathaway pushed spending on stocks its lowest level in more than five years, and the company was selling more stocks than it was buying by the end of the second quarter.Though Buffett is still buying some carefully selected equities, he’s buying...